Advanced planning and scheduling systems beat old-fashioned spreadsheets and ERP scheduling hands down. So why don’t more manufacturers use them? Malcolm Wheatley investigates.
Fenmarc Produce, based in Cambridgeshire, sells pre-packed prepared vegetables to some of the UK’s most challenging customers, Britain’s major supermarkets.
The challenge arises because of the demanding requirements of supermarkets in terms of responsiveness and ordering lead times. It’s a tough business, which the short shelf-life of freshly-prepared vegetables makes even more daunting.
With retailers demanding reliability of supply, optimum shelf-lives and short lead times, manufacturers’ factories need superior planning systems if they are to maximise capacity utilisation and productivity while simultaneously achieving consistently high levels of customer service.
Back in 2008, Fenmarc realised that its existing spreadsheet-based planning systems were no longer up to the challenge. A more sophisticated solution was called for if the business was to be able to successfully schedule the complex batch led manufacturing processes that were involved.
Moreover, it required a solution that could model in detail the factory’s capacity, factor-in the short shelf-lives of raw materials and then plan the flow of product across different production lines.
An advanced planning and scheduling (APS) system from enterprise applications vendor Infor was chosen as the solution which, according to planning manager Krystian Kaminski, “contained precisely the functionality that we needed.
“Simultaneously scheduling production across our six lines, the system can create a watertight plan for the following day in just 15 minutes,” he explains. “Having processed the orders, it factorsin each stage of the production process, including the preparation areas where raw materials are chopped and peeled and incorporates the washing flumes, six production lines, the mixing vats and the packaging and sealing machines, and then identifies the most efficient approach to meet customer requirements.” Nor is Fenmarc alone. Peer into the inner workings of a growing number of manufacturing businesses, and APS systems are to be found — either, as at Fenmarc, replacing spreadsheet systems deemed to be no longer adequate, or sitting alongside ERP systems, replacing or supplementing the ERP systems’ own planning logic.
And some manufacturers have gone even further.
Leicester-based automotive interior trim supplier Coba Plastics, for instance, has taken its APS from enterprise application vendor IFS onto the shop floor, with a purpose-written ‘front end’ that enables operators to directly interact with it. “All key workstations are equipped with a touchscreen terminal that interfaces directly with the APS application,” says Antony Bourne, global industry director at IFS. “Machine operators use the screen to access work instructions, drawings and data sheets for set up.”
But while APS has seen a steadily increasing rate of adoption over the last ten years, it’s fair to say that many manufacturers simply don’t yet appreciate the significance of what APS can offer: better due-date performance, better capacity utilisation, and lower work-in-progress levels.
And, what’s more, APS can deliver all this dynamically. It facilitates manufacturing in small batches at times of peak demand in order to meet delivery promises, for instance, and then switching back to larger batches when the pressure eases in order to boost capacity utilisation.
And it does this, of course, through some serious modelling and number-crunching: identifying the constraints or ‘bottlenecks’ in the production process, and balancing their utilisation against the counter-balancing imperatives of work-in-progress levels and customer due-date performance. The software algorithms underpinning it all are complex, carefully-guarded, and can call for some serious computing horsepower.
But there’s no doubt that they work. Stoke on Trent pottery manufacturer Steelite, for instance, has seen significant enhancements to its production efficiencies through the adoption of an APS solution from Coventry-based Production Modelling. “Planning used to be a massive challenge and, because many of the constraints were not covered, the output was far from ideal,” says production planning manager Rob Price.
“Now, as well as effective schedules, the whole planning process is completed in just hours rather than days.” What’s more, he adds, “we are seeing a much greater continuity of production and a flow of products. This in turn is leading to reductions in work-in-progress, major increases in utilisation, and significant reductions in overstocks. We are now also more flexible, making it easier to meet customer demand, including ‘short notice’ orders.” There’s a similar story at Hatfield-headquartered greeting card manufacturer International Greetings, where the implementation of an APS systems from Chippenham-based specialist vendor Preactor is credited with helping the 470-employee business to both expand and diversify. “We have grown from a £20m company to a £70m company, doubling the number of our converting machines, and handling more product lines with much larger jobs while reducing our planning department from twelve people to five,” says group IT manager Mike Harris. “Manually updating the plan used to take over two hours. Now, it’s just two clicks of a mouse button and is also always accurate.”
So given all this, why has APS struggled to gain traction? Why are manufacturers slow to see its advantages? One problem, says Graham Hackwell, technical director at APS specialist Preactor, is that “a large number of companies don’t realise that APS is the solution to the problems that they are experiencing.” In short, he says, they see poor due date performance, high work-in-progress levels and low machine utilisation but don’t see improved scheduling as the answer.
Julian Atherley, a consultant specialising in helping companies to improve their forecasting and scheduling systems, agrees. “There’s a deeply-ingrained belief within senior management that ‘big batches are best’ — and it’s strong as ever,” he says. “Coupled to a lack of appreciation of the limitations of MRP-based ERP scheduling, the result is all too familiar: high stock levels driven by MRP’s well-known ‘bullwhip effect’, and poor due date performance.” And there’s a distinction to be drawn, as well, between ‘planning’ and ‘scheduling’, says Rakesh Kumar, global industry product director for manufacturing, at Microsoft Dynamics ERP.
While APS deployments for longer-term planning have had a reasonable take-up, he notes, “the traction of APS deployments in terms of shorterterm planning has been slow — mainly because customers either don’t have the right information to feed an APS system, or it is scattered across multiple software systems and is difficult to collect.” Managements, too, may feel that they have bigger fish to fry. “Industry is focusing on a bigger problem elsewhere, such as demand planning and forecasting, or sales and operations planning,” says Hugh Williams, managing director of supply chain consultants Hughenden Consulting. “Manufacturing planning and scheduling have become sub processes to something much bigger, with hopedfor higher levels of benefit.” “There’s a lot of anxiety around new technology right now,” adds Sally Waterston, a director of Durham-based 60-employee business and IT consulting firm Waterstons. “They’re wanting to get more out of what they’ve got in place, and avoid the risks associated with implementing anything new.” Nor is senior management the sole problem: planning departments, too, can offer active resistance to APS. “Planners want to be in control,” says Jan Heerema, business development director for supply chain management at SAP, which has its own APS offering, APO. “Middle management can say: ‘This is great — we can optimise our bottlenecks.’ But planners look for reasons not to adopt it, and go back to their spreadsheets or card systems.” Antony Bourne, global industry director at enterprise applications vendor IFS, agrees — noting that under 10% of IFS’ manufacturing customers actually use the company’s APS module. “Planners can be very protective towards their existing systems and approaches, and it takes them time to actually appreciate the value of being able to reschedule very quickly, or call up ‘what if’ scenarios on demand.” Horses for courses That said, there are signs that the APS message is finally getting across. Both Preactor and Production Modelling, for instance, have gone to considerable lengths to publicise the merits of APS, including a strong focus on actual customer experiences.
Preactor, too, has released a free version of its software, with a no-cost perpetual license, for customers to try before buying.
What’s more, adds Preactor’s Hackwell, ERP vendors are becoming better at identifying situations where MRP-type scheduling simply won’t cut the mustard, and then pointing customers at either their own APS solution — if they have one — or to a specialist vendor such as Preactor.
Preactor’s APS, for instance, is certified for use with Microsoft’s AX and NAV ERP solutions, as well as with SAP’s Business Suite. There are also strong links with QAD, Sage, SYSPRO and SAP — Preactor’s website, for instance, contains no fewer than ten SAP-based user case studies.
“APS is getting traction,” insists Mike Straiton, managing director of Production Modelling.
“Unlike ERP’s ‘top down’ approach, we approach scheduling with a ‘bottom up’ model of a factory or production process — something that customers can see that they won’t be able to achieve with spreadsheets or a manual system.” Not that manufacturers are moving in lock step, though: some are very definitely moving quicker than others. According to Epicor’s Christine Hansen, marketing manager for the company’s range of supply chain products, it is industries where customer due date performance and plant utilisation are under pressure that are in the vanguard. “Right now, we’re seeing that aerospace, defence and specialised engineering are receptive to the APS message,” she says.
And the type of scheduling problem makes a difference, too, adds Infor’s Andrew Killick, head of the company’s business consulting arm. “There is certainly growing traction where there’s a need for schedules and plans where there are complex trade-offs to be optimised — and ERP just doesn’t do that,” he says. “Where the requirement involves contrasting scenarios, or ‘what-if’ analyses, then the answer is APS, and not ERP.” In short, then, the outlook for APS would seem reasonable. It might not always be an easy sell but it’s not an impossible one.